Question

Swiss Furniture Company manufactures bookshelves and uses an activityminusbased costing system to allocate all manufacturing conversion costs. The company incurs no direct labor costs. The following information is provided for the month of​ May:ActivityEstimated IndirectActivity CostsAllocation BaseEstimated Quantity ofAllocation BaseMaterials handling​$7,500Number of parts​7,080 partsAssembling​$11,900Number of parts​7,080 partsPackaging​$2,160Number of bookshelves​1,180 bookshelvesEach bookshelf consists of 6 parts. The direct materials cost per bookshelf is​ $35.What is the total manufacturing cost per​ bookshelf?

Answer 1

Answer:

$53.27

Explanation:

The computation of the total manufacturing cost per​ bookshelf is shown below:

= {(Total material handling ÷ number of parts) × each bookshelves} +  {(Total assembling cost ÷ number of parts) × each bookshelves} +  {(Total packaging cost ÷ number of bookshelves) × each package} + (direct materials cost per bookshelf)

= {($7,500 ÷ 7,080) × 6} +  {(11,900 ÷ 7,080) × 6} +  {($2,160 ÷ 1,180) × 1} + $ 5

= $6.36 + $10.08 +  $1.83 + $35

= $53.27